In a stunning U-turn for Liz Truss’s Government, Jeremy Hunt has reversed almost all tax cuts promised in last month’s Mini-Budget, including postponing a 1p reduction to income tax “indefinitely” and scrapping a proposed cut to corporation tax.
Mr. Hunt, who succeeded Kwasi Kwarteng on Friday as Chancellor, moved forward the release of his budget statement by two weeks in an effort to calm the markets. The Government will save almost £32 billion every year, according to the Treasury.
Here’s all you need to know about what has changed…
Tax
- Income tax reductions of 1p have been postponed ‘indefinitely’, meaning your income tax rates will remain the same.
- As of April, the Corporation Tax rate will increase from 19% to 25%
- The dividend tax reduction of 1.25% that had been proposed has been axed.
- Revisions to the IR35 tax rules have been scrapped.
- VAT free shopping for tourists has been thrown out
- The planned increases for alcohol duty will now go ahead
Energy
- The nationwide energy price guarantee will expire at the end of April 2023. Soon after, it will be allocated to a targeted vulnerable people and subject to a cap. It was planned to be a two-year programme that would provide assistance to everyone.
- After April 2023, the government will start a review to determine the best course of action for helping individuals and companies pay their energy costs.
What’s left of the Mini-Budget…
- National Insurance will continue to decrease by 1.25% beginning next month.
- There will still be a reduction in Stamp Duty.
- The cancellation of the Health and Social Care levy.
Our team at BK Plus understand that all of these inconsistent changes can be confusing, and it can be difficult to get to grips with your finances during this time. We’re here to put your mind at ease, so get in touch with us at hello@bkplus.co.uk and we will support you and your business through this.
